6 gut checks before the stock market’s opening bell

By Shawn Langlois

What’s all the fuss about tapirs?

Good morning.

Taper? You’ve hardly fixed her. Investors know the day will come, but they clearly aren’t ready for a world without the Fed’s cash hose.

Ben Bernanke’s ominous “in the next few meetings” comment triggered a nasty reversal in the U.S. markets yesterday that was soon to be upstaged by the much more extreme version in Japan this morning. The sellers don’t seem to have gotten their fill just yet, either. It’s abysmal out there. Everywhere.

Together, the world’s two biggest stock markets, which account for a whopping 42% of global market cap, served a double-barreled reminder of just how quickly investor mood can shift, no matter how bulletproof the market appears to be.

The good news is that we’ll be able to forget about it for an extra day this weekend. The historical odds are we could get back to making money, barring some other unforeseen twist. All five days surrounding Memorial Day have averaged gains, albeit small ones, dating back to 1971, according to the Stock Trader’s Almanac.

The economy: After Wednesday’s mania, today’s slate of data is rather anticlimactic. But that doesn’t mean it’s not worth paying attention to. First off, the number of people who applied for new unemployment benefits fell by 23,000 to 340,000, keeping the level in a range consistent with modest job growth. Economists had expected claims to drop to a seasonally adjusted 343,000. The average of new claims over the past month, a more reliable gauge than the volatile weekly number, edged down by 500 to 339,500. That’s just above a five-year low.

Also on tap, the U.S. Department of Commerce will post new single-family home sales. Economists are targeting a rise to an annual rate of 430,000 from a rate of 417,000 in March. In between, there will be another housing report and Markit’s flash manufacturing purchasing managers index for May. Read: Spotlight on the economy.

The buzz:Ford
/quotes/zigman/264304/quotes/nls/fF is in the spotlight this morning after the company said it will stop building cars in Australia in 2016, resulting in job losses and delivering a painful blow to a government that’s been spending big to prop up its auto industry. Crossing Wall Street’s Eddy Elfenbein says he thinks Ford is a $20 stock.

The chart of the day: This could be “the most bullish pattern Apple has created in years,” according to the Kimble Charting Solutions blog. Fresh off his timely call of an Apple turnaround a month ago, the blogger said he sees a bullish inverse head-and-shoulders pattern forming. If Apple breaks above $465, consider it confirmed.

KimbleCharting

The call of the day: Tesla
/quotes/zigman/118681/quotes/nls/tslaTSLA has been smothered with love from longs and loathing from shorts this year as the stock has been unstoppable. But Gregory Vousvounis says to enjoy it while it lasts because the company’s “glory days will be few as bigger competitors are already catching up.” He specifically pointed to big-pocketed players like Daimler and Toyota. “Tesla isn’t a long-term play,” he writes. “It has no protection against competitors and there are many of them out there with the means to hit it hard.” He likened the scenario to what happened to Apple when Samsung reared up. In premarket trading, Tesla shares are down 3.4%.

Random reads: All New York City Football Club needs now is “a washed up old star.” What about Wayne Rooney? Or any one of these candidates?

The headlines lately have been littered with beheadings, tornados, kidnappings, shootings … as if the Mayans were just a bit off on their target date. So here are 31 charts compiled by Business Insider that will “restore your faith in humanity.” And the internet thanks you for putting them all on the same page.

Here’s the nerdy details you might have missed amid the Xbox hoopla. You had me at “eight 64-bit cores, 8GB of high-speed RAM, and an on-chip GPU with built-in sRAM.”

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About Need to Know

Need to Know (NTK) guides investors to the most important, insightful items required to chart a course ahead of each trading day. Anchored by lead writer Shawn Langlois, NTK will sift through the fire hose of news, commentary and data, from traditional and non-traditional sources, and extract what’s most essential. You can start reading NTK here as it begins publishing at approximately 6:30 a.m. ET, or sign up here to get a version in your email box every morning at approximately 8:45. a.m. ET.